Real estate is everywhere. Lots of people go into it. Lots of people understand it. After all, many of us will own a home at one point, and even more of us will rent one. It’s kind of easy to understand that business, because we’re all customers of that business.
Other people embrace a more complicated calling. For Grant Norwood, it was oil and gas.
“Growing up in Texas, it’s all around you,” Norwood, CEO of Norwood Energy Corp, “so there was always that kinda curiosity. How does it all work? What does it do? Is it just so we can fill up our cars?”
I Wouldn’t Have Hired Me
Norwood knew lots of people with jobs in the oil and gas industry … but he wanted more. He wanted to run the show. So he took an unconventional approach to building his career — a series of entry-level jobs in different departments of different oil companies, never more than six-months to a year, learning the business in the trenches from all sides.
“I was completely forward with them,” Norwood, who prefers a minimum of ten years’ commitment from his own employees, said. “I wouldn’t have hired me.”
But the years in grunt-level positions paid off. Now Norwood Energy Corp fills a lucrative niche in the oil business — recognizing opportunity hotspots in undiscovered areas of the country where they can operate significantly below what it costs the Exxons and the Chevrons of the world to operate.
The Power of Small
That’s not the only advantage Norwood has over the big players in the industry. He prides himself in turning the “smallness” of his operation to his advantage.
“In those [larger] companies, even the executives … they don’t have total control,” Norwood said. “I don’t think these big companies care about the guys on the floor. I don’t even think they know each other.”
“It’s like ‘Telephone’ when you’re in grade school,” he said. “‘Sally’s wearing blue pants’ by the time ‘Billy’s got a blue hat,’ you know? By the time you pass it around and everybody regurgitates it, it’s not the same.”
“So just being private, being smaller … I know everybody, everybody’s birthdate, kind of car they drive, how many kids they have, all that stuff. So we’re all really close and then everybody’s opinion matters.”
It’s In Everything
I said above that we all understand real estate because we’re all customers of real estate … but in a very real sense, we’re all also customers of oil. Even if we don’t fully understand the business, even when we don’t realize it.
“It takes oil and gas to make plastics, disposables, medicines, fabrications,” Norwood said. “Everything we have … if it’s not directly oil, it’s created by it … Your fertilizers, all your food, all that stuff. It really does not matter. You can’t find something that it’s not in the supply chain or the supply itself, especially plastics, handheld TVs, all the technology, all that stuff.”
Norwood doesn’t anticipate that changing any time soon. He knows how much oil it takes to produce solar panels and windmills, and he thinks we’re still a long way from them being viable replacement sources of energy.
“Iit’s okay with me,” He said, “‘cause all the oil it takes to build that windmill is a net loss of energy. So that makes my demand go up.”
A Finite Supply
Still, he recognizes the need for his industry to evolve into alternative energy sources, for one simple reason — make no mistake, at some point the oil will run out.
“I honestly hope they crack the code,” Norwood said. “If we’re honest with ourselves and the reserves that are actually producible, we’ve got about sixty years’ worth of recoverable oil at the rate we’re going.”
“Our kids might be okay, but their kids won’t,” he said. “We won’t have the energy we need, and nobody wants to be plunged back into the dark ages … How will we get our medicines? How will the machines that we give us, our procedures, and all the luxuries we enjoy today?”
Like Buying Bitcoin 10 Years Ago
For the time being, though, the gravy train is rolling. How well?
“You know, if you start looking at 10X+, there’s just more at risk,” Norwood said. “And if you’re fine with the risk, jump right in. But if you’re happy with like 3X-8X in a fair amount of time, then that’s your starting point.”
“I’m actually wanting to put out a training course on how to navigate those waters,” he said, “‘cause a good oil deal … It is like buying Bitcoin ten years ago. A bad oil deal … it’s like buying Bitcoin a few months ago.”